Buffer Explained
You will continue to have a trailing drawdown until you reach a specific profit threshold (the "profit buffer"). Once you surpass this threshold, your drawdown becomes fixed and transitions to a static system. At this point, you cannot lose more than the predefined buffer amount.
Examples and Calculations:
$10,000 Account
Explain How Buffer Works on a $10,000 account.
$10,000 Stocks Account
For a $10,000 Stocks Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 3.15%)
$10,000 + ($10,000 x 3.15%) = $10,315
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $10,015 (Buffer Target - Drawdown) so ($10,315 - $300)
Until your account reaches $10,315 your drawdown is still trailing.
Once your account has officially passed $10,315, your drawdown becomes static. Meaning that if your account value drops below $10,015 then your account is breached.
$10,000 Options Account
For a $10,000 Options Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 5.75%)
$10,000 + ($10,000 x 5.75%) = $10,575
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $10,075 (Buffer Target - Drawdown) so ($10,575 - $500)
Until your account reaches $10,575 your drawdown is still trailing.
Once your account has officially passed $10,575, your drawdown becomes static. Meaning that if your account value drops below $10,075 then your account is breached.
$50,000 Account
Explain How Buffer Works on a $50,000 account.
$50,000 Stocks Account
For a $50,000 Stocks Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 3.15%)
$50,000 + ($50,000 x 3.15%) = $51,575
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $50,075 (Buffer Target - Drawdown) so ($51,575 - $1,500)
Until your account reaches $51,575 your drawdown is still trailing.
Once your account has officially passed $51,575, your drawdown becomes static. Meaning that if your account value drops below $50,075 then your account is breached.
$50,000 Options Account
For a $50,000 Options Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 5.75%)
$50,000 + ($50,000 x 5.75%) = $52,875
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $50,375 (Buffer Target - Drawdown) so ($52,875 - $2,500)
Until your account reaches $52,875 your drawdown is still trailing.
Once your account has officially passed $52,875, your drawdown becomes static. Meaning that if your account value drops below $50,375 then your account is breached.
$75,000 Account
Explain How Buffer Works on a $75,000 account.
$75,000 Stocks Account
For a $75,000 Stocks Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 3.15%)
$75,000 + ($75,000 x 3.15%) = $77,362.5
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $75,112.5 (Buffer Target - Drawdown) so ($77,362.5 - $2,250)
Until your account reaches $77,362.5 your drawdown is still trailing.
Once your account has officially passed $77,362.5, your drawdown becomes static. Meaning that if your account value drops below $75,112.5 then your account is breached.
$75,000 Options Account
For a $75,000 Options Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 5.75%)
$75,000 + ($75,000 x 5.75%) = $79,312.5
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $75,562.5 (Buffer Target - Drawdown) so ($79,312.5 - $3,750).
Until your account reaches $79,312.5 your drawdown is still trailing.
Once your account has officially passed $79,312.5, your drawdown becomes static. Meaning that if your account value drops below $75,562.5 then your account is breached.
$100,000 Account
Explain How Buffer Works on a $100,000 account.
$100,000 Stocks Account
For a $100,000 Stocks Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 3.15%)
$100,000 + ($100,000 x 3.15%) = $103,150
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $100,150 (Buffer Target - Drawdown) so ($103,150 - $3,000)
Until your account reaches $103,150 your drawdown is still trailing.
Once your account has officially passed $103,150, your drawdown becomes static. Meaning that if your account value drops below $100,150 then your account is breached.
$100,000 Options Account
For a $100,000 Options Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 5.75%)
$100,000 + ($100,000 x 5.75%) = $105,750
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $100,750 (Buffer Target - Drawdown) so ($105,750 - $5,000).
Until your account reaches $105,750 your drawdown is still trailing.
Once your account has officially passed $105,750, your drawdown becomes static. Meaning that if your account value drops below $100,750 then your account is breached.
$150,000 Account
Explain How Buffer Works on a $150,000 account.
$150,000 Stocks Account
For a $150,000 Stocks Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 3.15%)
$150,000 + ($150,000 x 3.15%) = $154,725
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $150,225 (Buffer Target - Drawdown) so ($154,725 - $4,500)
Until your account reaches $154,725 your drawdown is still trailing.
Once your account has officially passed $154,725, your drawdown becomes static. Meaning that if your account value drops below $150,225 then your account is breached.
$150,000 Options Account
For a $150,000 Options Account, here is the formula to calculate your buffer profit target.
Formula: Starting Equity + (Starting Equity x 5.75%)
$150,000 + ($150,000 x 5.75%) = $158,625
Once you hit your Buffer Target, your drawdown would go to static. In this example it would move to $151,125 (Buffer Target - Drawdown) so ($158,625 - $7,500).
Until your account reaches $158,625 your drawdown is still trailing.
Once your account has officially passed $158,625, your drawdown becomes static. Meaning that if your account value drops below $151,125 then your account is breached.